This blog is all about economic and financial events happening in Mongolia.

Wednesday, July 16, 2014

First Solar Calling Off Development Of 2 GW Solar PV Plant In Inner Mongolia

One of the largest solar PV companies in the world, First Solar, has finally officially decided to forgo its previous long-standing plans to develop a utility-scale 2 GW solar PV power plant in Inner Mongolia. The 2 GW project had been slated for development in the Inner Mongolian city of Ordos City. For those that don’t know, Inner Mongolia isn’t actually part of modern Mongolia, but of China — the relatively resource-rich region is culturally rather distinct from what you might think of when imagining China.

The project has been in something of a state of limbo for the past few years — never really making it past the drawing board despite the Chinese National Development and Reform Commission having approved a pre-feasibility study for the construction of its first 30 MW phase all the way back in 2010.

The project was actually announced even further back, though, in September 2009. And there was even a fair bit of pomp accompanying its announcement — with President Obama and the Chinese President at the time, Hu Jintao, being present at the signing of an official project agreement. (Just goes to show, pomp doesn’t amount to much does it — projects live or die based more on their own merits and/or back-room deals.)

According to First Solar’s spokesperson, Steve Krum, despite the show, an agreement on the pricing of the electricity was never reached between First Solar and the Chinese authorities.

If the project had gone ahead, First Solar would have also constructed a manufacturing plant in the region in order to provide the solar modules for the power plant — quite an investment. The talk at the time was that such a development would have helped the American company break into the then nascent Chinese market.

“Due to the market environment, we aren’t going to pursue the Ordos project further,” Krum stated in an interview with Bloomberg. “The plant was never included in the company’s pipeline of contracted projects.”